Car dealers usually finance the acquisition of their inventory, especially new cars, by a loan, known as a floorplan loan. Floorplan loans, typically provided by commercial banks, are low cost loans that are secured by the inventory purchased with the loaned funds. When a vehicle is sold to a customer, and the dealer receives payment, the portion of the floorplan loan covering the sold vehicle comes due. Thus the amount of the outstanding floorplan loan at a given time depends on the cost of the dealer's unsold inventory at that time, i.e., on the amount paid by the dealer to the car manufacturer for the dealer's unsold and sold but not yet paid-for inventory.
The vast majority of consumers who purchase their vehicles from a car dealer finance the purchase with retail loans. Typically, the customer obtains the retail loan via the dealer, who in turn places the loan with a retail lender. In order to apply for a retail loan, the dealer must capture a customer's personal details, such as social security number, date of birth, address, and so on, as well as other data.
Although the customer typically drives away with the car within 24 hours of purchase, it can take several days or even a week before the retail loan is funded, and the dealer receives the funds corresponding to the retail loan. The floorplan loan on the sold vehicle usually becomes due as soon as the dealer receives the funds for the sale.
Banks, as well as other types of lending sources, make floorplan loans to car dealers at low rates of interest, in part because the loans are secured by the inventory purchased with the loan. When a dealer sells a vehicle and receives payment for the sold vehicle, the dealer becomes obligated under the floorplan contract to repay the floorplan lender the amount corresponding to the floorplan loan on the sold vehicle. It follows that the outstanding floorplan loan amount should decrease each time a dealer is paid for a sold vehicle.
Although most floorplan contracts permit dealers to delay repayment of their floorplan loans until the dealers actually receive the funds corresponding to customers' retail loans, they typically do not permit loan repayments to be deferred beyond this point. In practice, many dealers delay repayment on their floorplan loans beyond the normal deadline without knowing it, but a small proportion may delay deliberately because the delay gives a dealer working capital. Such delays, whether accidental or deliberate, are not in compliance with the floorplan loan agreement, reduces the lending source's collateral and may cost the lending source money.
In order to monitor compliance with the terms of the floorplan loan, the bank or other type of lending source holding the floorplan loan needs to audit the unsold inventory of the dealer to verify that the amount outstanding on the floorplan loan corresponds to the portion of the dealer's unsold inventory being financed by the lending source's floorplan loan. Most lending sources periodically conduct their floorplan audits by sending a representative to the dealer's showroom, where they can physically “see” each unsold vehicle.
U.S. Pat. No. 5,323,315 to Highbloom (“Highbloom”) discloses a system and method for monitoring the status of items serving as collateral for securing financing. In particular, Highbloom discloses receiving financing information from a plurality of financing (lending) sources, and comparing the information from the different financing sources to determine whether a particular item of personal property simultaneously serves as collateral to secure financing from more than financing source. The financing sources can include those financing floorplans and those providing consumer credit.
U.S. Publication No. US 2002/0198761 by Ryan et al. is directed to a method for determining a current demand for one or more categories or classes of vehicle for a dealer by obtaining information from suppliers identifying a supply of each of the vehicles for sale, designating a market for each class of vehicle for which demand exceeds a threshold value, and notifying the dealers who have a demand for the particular class of the market.
U.S. Pat. No. 5,878,403 to DeFrancesco et al. discloses a computer implemented automated credit application and routing system for selectively receiving and forwarding a credit application from a car dealer's computer system to at least one consumer funding source to obtain a loan for the purchase of a car from the dealer.
There is no system or method in the prior art, which provides a computer-implemented, floorplan auditing system which enables timely, inexpensive and accurate audits of the portion of a dealer's inventory financed by a floorplan loan.